• by Adam Hecht , Op-Ed Contributor, September 17, 2017

Three sell-side platforms (SSPs), Rubicon Project, AppNexus and PubMatic, recently announced that they would be joining forces with a more streamlined header-bidding option for publishers at Prebid.org. 

The announcement states that the three technology companies are interested in helping media companies reduce load times and speed up their bidding process to improve user experience and increase revenue. The open-source project also encourages other players to join forces to create new standards for the good of the media ecosystem.

Some of this is true, but it won’t be enough to drive any major positive changes for most publishers.

Where’s the Value?

Media companies have been awash in “open” initiatives that are meant to help them be more competitive, many through the Interactive Advertising Bureau. Ads.txt, a format for buyers, sellers and middlemen, enables more transparency. IAB’s OpenRTB is proposing more stringent participation identification across all supply-side players that would help legitimate media companies differentiate themselves from fraudsters.

All of these initiatives come with the promise of benefits for a large part of the ecosystem. The Prebid.org announcement claims to shave off a few hundred milliseconds from the bidding process -- all in all, not that compelling.

Most large publishers have engineered a header bidding process that has done this already. It’s possible that the three SSPs will entice a few mid-sized or smaller publishers that haven’t implemented header bidding at all, or who appreciate the small boost in speed, but it's unlikely that this changes the way these three companies do business with the major publishers.

Attacking a Tech Problem, but Not the Tech Problem of Duplicate Demand

Tom Kershaw, the face of Prebid.org, says that without a shared standard, header bidding will go the way of viewability and fraud -- totally out of control. Yet the solution proposed doesn’t even attack the biggest technology issue facing programmatic: duplication of demand.

Rubicon recently purchased nToggle to help the company decrease demand duplication, in which the same advertiser ends up bidding for the same impression against itself through different partners. Many supply-side companies take advantage of loose rules in programmatic advertising and use demand duplication to boost competition and prices. They can set multiple floors, send back multiple bids, and even quietly switch between second-price and first-price auctions to reap higher prices. Prebid.org’s solution does nothing to solve for this mess.

Time to Cull the Herd

There is no reason for so many technology companies to exist in the marketplace. Publishers have too many black-box middlemen taking too high a margin, when half as many transparent partners could reasonably represent all the demand in the market. A few seconds less time spent in the header isn’t going to change that.

There is a trend for SSPs to offer first-price auctions, and hopefully publishers and demand partners require more transparency. When this happens, SSP margins will go down  -- and their footprints might, too. The most important partners look like they are Facebook, Google and Amazon, all offering a huge amount of unique demand, albeit little transparency to date. Even so, the others will need to pass a high hurdle to earn a spot in the header in the future. Prebid.org is mostly a distraction from these larger trends.

Publishers have a lot of trouble making programmatic work well, and some code from three ad-tech vendors isn’t necessarily what they need to increase their bottom line. More transparency, less duplicated demand, shorter supply chains between them and their advertisers, and lower margins for middlemen are all going to matter a lot more in the long run.